Jennifer Westacott - Interview with Miranda Devine, Miranda Live

27 February 2018

Event Interview with Miranda Devine, Miranda Live Speaker Jennifer WestacottDate 27 February 2018 (broadcast)Topics US business delegation, company taxE&OE

Miranda Devine, host: I'm here at the JW Marriott in Washington, D.C., with Jennifer Westacott, who's been part of the high-powered business delegation that's been travelling with Malcolm Turnbull to the United States to meet Donald Trump and to meet all the governors of the states here at this conference. Jennifer Westacott, your trip here with Malcolm Turnbull, you've met Donald Trump. Was it worthwhile?

Jennifer, chief executive: Absolutely. I think a lot of Australians forget that America is still the largest investor in Australia. America is still one of the biggest destinations for Australian investment. We've got a strong economic relationship. We've got a strong cultural relationship. This was an opportunity for leading business figures, state premiers, the Prime Minister, famous business figures, the governors to come together to say, "how can we strengthen our relationship"? To me, it was just an outstanding trip.

Miranda: Are there any lessons for us from the way America does things?

Jennifer W: I think there are lessons certainly in the Trump administration's direction for economic policy. Their tax cuts, but not just their tax cuts, their deregulation of the economy. We heard time and time again from business leaders yesterday that the reduction of red tape is making it so much easier to do business. It's cutting down times to get things done, as well as the tax cuts having an immediate effect, so companies talking about immediate investment decisions, immediate decisions to pay their workers bonuses, and also giving people that confidence that the economy's heading in the right direction, that sense of enthusiasm, the animal spirits as people talk about it, which spurs on investment.

I was here a couple of years ago, Miranda, and people were very depressed, very down. They were like, "we're going nowhere. We've lost our economic direction". That's not the sense you get here. Last time I was here last year, when I thought the tax cuts would get through, and everyone doubted it, and I said, "no, I think this is going to happen", and then yesterday we just got the sense of absolute energy in the new economy.

Miranda: That's Donald Trump.

Jennifer: I think it is. I think there will be people with different views about President Trump, but there's no doubt he's put America first, put business right in the centre of his policy agenda, really pushed through those tax cuts with his Republican Party for the betterment of the country, driving those middle-class tax cuts forward for the benefit of citizens. He's put that agenda absolutely front and centre, and I think that's created a tremendous amount of energy and enthusiasm. A lot of people like Visy, an Australian company, Anthony Pratt said he wasn't going to make those big investments. It was contingent on President Trump being elected, so big enthusiasm.

Miranda: Do you think that in Australia that we have something to learn from American enthusiasm?

Jennifer: You bet. Obviously, I've been a very strong advocate for company tax reduction, because we have to be competitive. If we're not competitive, we will not attract investment. We will not attract investment, that drives productivity, which drives higher wages. We will not attract the investment that drives more job creation. They've created two million jobs here. We created more than 1,000 last year off the back of some of the government's initial tax cuts and the broader state of the economy, but there's an opportunity for us to just really, I heard the expression yesterday, supercharge the economy. That's the lesson I think we've got to walk away. Let's supercharge our economy for the benefit of the working people of Australia, of the revenue of governments. That's the message that comes out of America.

Miranda: Do you think the government's tax cut, this next tranche, goes far enough? It's a lot smaller and slower than the US one?

Jennifer: Yeah, obviously they've had a 14-point reduction instantly, and that has a huge effect, as well as this instant write-off, this depreciation.

Miranda: That makes a big difference.

Jennifer: Huge difference for big, capital-intensive projects. I think we've just got to get the 25 per cent done in Australia.

Miranda: We're dropping five per cent, but over 10 years.

Jennifer: That's right.

Miranda: They've dropped 15 immediately.

Jennifer: Yeah. The 25 per cent will just keep us in the race. Obviously, we would have liked to have seen it done faster, but we've got big fiscal issues in the country. We've got to balance that with the need to grow the economy. Having said that, companies like Rio Tinto, BHP, all have said that that decision by the government, if it passed through the Senate, it would change their decisions immediately, not in 10 years' time, immediately. Immediately they’ll start looking at their projects, and they'll start making those investments. The point Jean-Sebastien Jacques from Rio Tinto made yesterday, which is very important, is that, that signal, if it's not given, the actions companies will take to go somewhere else, that also happens immediately, too. If they can't see that signal coming into our economy, they will make decisions to put investments in other countries, and that's not good for Australia. People talk about it'll take a long time to get the effect of the cut. That's not true. Companies tell me they'll change their decisions immediately.

Miranda: And so that's a message for the Senate?

Jennifer: A message for the Senate, a message for the Labor Party. They once supported company tax cuts. We used to have bipartisan agreement on the core economics. Now we don't. It's really up to a responsible opposition who's once held this position that they support a lower company tax rate to get back into the centre ground for economic policy, get to acting in the national interest, and work with the government to pass the tax cuts, because this in the country's interests.

Miranda: This sort of delegation has never happened before, where the Prime Minister has come here with so many business leaders. What's been the benefit of that?

Jennifer: Obviously, those business-to-business contacts. You could hear people at the tables yesterday saying, "I'd really like to talk to you about that", passing business cards, but really actively following that, saying, "let's get together next time I'm here". I saw a lot of people wanting to come and see what we're doing in Australia. You can't underestimate those business-to-business contacts. You can't underestimate those camaraderies that occur that make doing business easier.

I think we had a lot to sell as a country, too. The work that some of the states are doing, particularly in New South Wales, on infrastructure, on asset recycling, I think everyone was blown away by that. When Gladys Berejiklian went through the data on her state, you could see people going, "wow, we want to live there". I think there was a great interchange of things we could do, and we all agreed on some priorities and things that we could all work on together, and governments could work on collectively, to strengthen the relationship.

Miranda: Now tell us about Donald Trump. What's he like as a man?

Jennifer: He was incredibly personable. He was very charming. He will look you in the eye, and engage you directly. He completely changed his diary so that he would meet with the business delegation, and he went around the room to every single person, had a brief conversation. It wasn't just perfunctory. It was meaningful. I was very impressed.

Miranda: Why do you think he cares about Australia?

Jennifer: In his press conference yesterday, I think he made it very clear. This is just one of those great bilateral relationships. We're here celebrating 100 years of mateship, 100 years of Australia being in every single battle, the only country in the world to be in every single battle with the United States, involving the United States. There's tremendous relationships between our two countries, and I think he understands that and appreciates that. I think he has very close personal ties with some prominent Australians. It was fantastic to have the great Greg Norman on our trip, who's not only a wonderful golfer but a businessman-entrepreneur, who really understands probably more than anyone in the world what competitiveness means. He made a marvellous contribution.

Jennifer: That's right, and because Mr Pratt has made huge investments in the US off the back of President Trump's tax cuts and that overall feeling of a positive economic environment. I think everyone from Australia yesterday felt, number one, we've got to get competitive. We've got to keep pace with what they're doing. Number two, we've got a great story to sell.

The only other thing that we discussed that I think hasn't got enough media coverage is trying to brand Australia better. Everyone knows who we are, but do they really know what we've got to offer in terms of our products? Andrew Forrest and I have been working for some time on trying to get a single brand for Australia, so that people choose Australian products over Brazilian products and other products from around the world. That was discussed, too, that we've got to probably do a little bit more promoting our competitive advantages, our strengths as an economy, and of course our massive opportunities in tourism.

Miranda: And I suppose food exports, as well.

Jennifer: Absolutely. We've got the cleanest, greenest food probably in the world. We're certainly among that high-level agriculture. We could be doing so much more in terms of value-added agriculture products into Asia but also into the United States. We've got a great story. We need a single brand. We need to tell that story about what it means to buy Australian.